If the pandemic-imposed economic slowdown benefited any industry, it is the second-hand car industry. Some of the cases in point are:
- The adversely affected supply chain of automobiles resulted in a shortage of new cars.
- Since there was neither manufacturing nor supply of new vehicles, second-hand car prices skyrocketed.
- Furthermore, the shortage of critical vehicle components, especially semiconductors further disrupted supply.
- All these factors together began a chain reaction that translated into higher prices of second-hand cars, which is still evident.
However, as the pandemic recedes and manufacturing is restored, things are expected to normalise. But the question begs: when will the prices normalise? A simple answer is when the supply-demand is balanced out.
While an outcome is yet to be seen, let’s see what a few factors that will mould the expectations from the second-hand car industry in 2022 are:
Slow manufacturing rate
Since car manufacturing slowed down or stopped during the pandemic, which began in 2019, automobile companies will be reeling under the after-effects for some more time to come.
This will lead to a further increase in prices of pre-owned and new cars. But, on the other hand, with the introduction of expensive new technology proposed in cars, the current second-hand car industry will get an impetus, resulting in high prices.
Demand supply gap
The demand-supply gap created due to the cessation of manufacturing will take some time to bridge. Until then, the second-hand car industry will witness a rise in prices, as it is the only option available to people planning to own a car. Till the production increases to balance the supply-demand, the second-hand car prices are expected to increase for at least another year.
The latest technology at remarkably low prices
The second-hand car industry is robust since automobile technology takes time to be outdated. Therefore, second-hand cars offer excellent technological value to the users at a considerably lesser price.
The demand is higher for 3-4 years older cars, as these models still have all the latest technologies, are relatively new, and are priced lower than the new models. For this reason, second-hand cars are experiencing an increase in sales despite the rising prices.
Availability of finance
Finance is a significant enabler for the rising sales of second-hand cars. With used-car loans available, you can own a certified vehicle without worrying about erosion in savings. Moreover, experts attribute incredibly affordable automotive loans to the huge demand for used and new cars during the pandemic, leading to higher prices.
You can approach your financier to get acquainted with the used car loan eligibility criteria, repayment tenure and EMI. In addition, there are used car loan EMI calculators available online to give you a fair idea. Though the used car loan interest rates are higher than the new car interest rates, you can get the best rates by comparing the options.
Will there be a price correction?
At present, second-hand cars may not show any signs of price correction. However, as the manufacturing and supply bottlenecks resolve with time and new technology such as electric vehicles appear, second-hand car prices may return to normal only after 2022.
So, if you are planning to buy a good second-hand car, you can consider buying it now. Shortly, with the introduction of revolutionising technology, car prices may surge even more.
Today, owning the luxury car of your dreams is possible in the second-hand car industry, with used car loan available at attractive terms. Used car loan interest rates range from 10 to 18 per cent, depending on your credit score. In addition, the used car loans eligibility and interest rates may vary with time. So close the deal for your favourite car today before it becomes a stretch to afford!